October 18th marks the 9th trading day since the A-share market opened with a significant gap higher on the morning of October 8th, followed by a substantial correction. In the early morning session, the market experienced a decline, reaching a low of 3,152.82 points, which is also the upper edge of the significant gap left by the market on September 30th. It appeared as if the bears were poised to completely fill this gap in one breath.

At this very moment, three pieces of positive news emerged from the Financial Street Forum held that day.

Firstly, the central bank indicated that, depending on the market liquidity situation before the end of the year, it would choose an appropriate time to further reduce the reserve requirement ratio by 0.25 to 0.5 percentage points; lower the interest rate for 7-day reverse repurchase operations in the open market by 0.2 percentage points; and decrease the medium-term lending facility (MLF) interest rate by 0.3 percentage points. In the morning of the same day, commercial banks had already announced a reduction in deposit rates, and it is expected that the Loan Prime Rate (LPR) to be announced on the 21st will also decrease by 0.2 to 0.25 percentage points.

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To put it simply, the central bank continues to inject liquidity, maintaining an overall loose market liquidity.

Secondly, the Financial Regulatory Authority stated that it supports qualified insurance institutions in establishing new securities investment funds, with several insurance companies having already submitted related applications. Currently, financial asset investment companies have signed intent funds exceeding 250 billion yuan. Support is also given to large banks to accelerate the replenishment of core tier-one capital and expand credit growth space. Efforts are intensified to implement a package of policies to support stable economic growth and to speed up the smooth circulation of funds.

Thirdly, the China Securities Regulatory Commission (CSRC) announced that there are currently 20 securities and fund companies approved to participate in swap facilitation operations, including CITIC Securities, CICC, Guotai Junan, Huatai Securities, Shenwan Hongyuan, GF Securities, Everbright Securities, China Securities, Zheshang Securities, Guoxin Securities, Orient Securities, Galaxy Securities, China Merchants Securities, East Money Securities, CITIC Construction Investment, Industrial Securities, Huaxia Fund, E Fund, Harvest Fund, etc., with the first batch of application quotas exceeding 200 billion yuan.

Following the release of significant positive news to support the capital market on September 24th, the central bank, the regulatory authority, and the commission once again demonstrated to the market their determination to support the capital market's positive development.

Previously, despite continuous positive news in the market, it has not been able to stop the A-share market from falling since the high point after the National Day holiday.For instance, the Ministry of Finance's press conference did not disclose the amount of bond issuance, which was considered to fall short of expectations. Furthermore, the Ministry of Housing and Urban-Rural Development proposed to resume the monetized shantytown renovation in some cities, expanded the whitelist of real estate developers, and increased the bailout amount to 4 trillion yuan, which was also seen as lacking novelty.

In addition, there are still some bearish factors troubling investors continuously.

On that day, the National Bureau of Statistics released the latest statistical data. According to preliminary calculations, the Gross Domestic Product (GDP) for the first three quarters was 94.9746 trillion yuan, with a year-on-year increase of 4.8% at constant prices. Looking at it quarter by quarter, the GDP grew by 5.3% year-on-year in the first quarter, 4.7% in the second quarter, and 4.6% in the third quarter. On a quarter-over-quarter basis, the GDP increased by 0.9%.

Although this news was anticipated, it was actually bearish, which is also an important reason for the continued decline in the A-share market in the early morning.

It was not until around 10:15 a.m. that relevant statements from the central bank, the financial regulatory authority, and the securities regulatory commission were gradually released, and the market finally reacted.

As the saying goes, "You can always call back the east wind."

Around 10:07 a.m., Tianfeng Securities, the leader of the first attack, was the first to sense the change and led the rise. The bull market flag bearer once again stepped forward, leading the counterattack and greatly boosting the market's confidence to do more.

During the lunch break, high-level speeches on technology were heard: "To advance Chinese-style modernization, technology must take the lead. Technological innovation is the only way."

After the market opened in the afternoon, technology stocks, mainly semiconductor chips, began to soar, with a batch of stocks on the ChiNext and STAR Market heading straight for the daily limit.

Technology stocks were another vanguard, besides the bull market flag bearer securities firms, in the first wave of attacks.At present, two bull market engines have restarted together, boosting the overall market sentiment. Various stocks are on the offensive, and the long-awaited rebound that investors have been looking forward to has finally arrived.

As the market approached the close, there was a slight decline, but the indices across the board still closed with large positive candles. The Shanghai Composite Index rose by 2.91%, the Shenzhen Component Index increased by 4.71%, and the ChiNext Index surged by 7.95%. The number of stocks that rose exceeded 5,000, with 1,133 stocks in Beijing, Shanghai, and Shenzhen rising by more than 5%.

On that day, the turnover of the Shanghai and Shenzhen stock markets broke through two trillion yuan, with all industries receiving net inflows of main funds. Data shows that the electronics industry received a huge net inflow of 49.4 billion yuan, non-bank finance received a net inflow of over 26.4 billion yuan, computers received a net inflow of over 13.5 billion yuan, and power equipment received a net inflow of 10.8 billion yuan. Communications, machinery and equipment, automobiles, pharmaceuticals, and other industries under the Shenwan classification also received net inflows of over 5 billion yuan each.

The active entry of funds has once again evoked people's memory of "the bull market returning quickly."

After the market closed, there was a lot of discussion inside and outside the market: Is this large positive candle on Friday the beginning of the second offensive, or just a rebound during the decline?

Industry insiders believe that historically, after the A-share market sees a huge volume, the market generally does not end immediately, and there is at least an opportunity to make a second top.

In addition, whether it is the Hong Kong stock market or the A-share market, both the price-to-earnings ratio and the price-to-book ratio are still at a relatively low percentile. After the adjustment, the market has returned to a suitable position for buying.

Zhang Yusheng, the chief strategist at Everbright Securities Research Institute, pointed out that the market is currently in a stage of fluctuating upward movement, with the core focus being the policy rhythm. It is expected that the downward space in the fluctuation range is limited, and the upward space in the fluctuating upward movement will depend on the strength of future policies and the entry of incremental funds.

It is difficult to buy a bull market that turns back.If one considers the rise on Friday as the rallying call for the second offensive, then what is the main theme of the second wave of the bull market?

Guotai Junan points out that since late September, passive funds have been净流入 technology growth and large financial heavyweight stocks. Passive funds have concentrated on core industrial tracks such as semiconductors/ batteries/ photovoltaics/ medical devices/ securities/ communication equipment/ white liquor, etc. From the transaction situation, the transaction proportion of passive funds in the technology growth sector has significantly increased. The transaction of passive funds is highly concentrated in core industrial tracks, with the CR10 transaction concentration of the first-level industry being greater than 70%, and the transaction concentration and transaction heat trend are roughly in the same direction.

On Friday morning, Zhang Chi of Guojin Securities believed that we should cherish the opportunity to get back on the bus, and the structure is "Technology Bull".

During the day, the STAR Market indeed had a big outbreak, and the STAR Market ETF once again soared.

As of the close, the STAR 50 index rose by 11.3%, far exceeding other major market indices. Looking at specific stocks, the STAR Market stocks all rose by 6.4% on the day, and a total of 10 stocks achieved a 20cm daily limit. Among them, the total dragon head of the sector, SMIC, set a new high since the second day of listing, and doubled in the past 12 trading days.

Regarding the future market trend, Zhang Chi believes that the cooling of overseas risks is limited to the domestic asset side; domestically, "loose money + loose finance" both start from the liability side, which is expected to repair the cash flow and balance sheets of local, corporate, and household sectors, thereby driving marginal improvement in domestic demand. It is expected that the macroeconomic data, medium-level prosperity, and micro-level profit data in the fourth quarter are all expected to improve marginally, supporting the market to continue to rise.

He judged that the "market bottom" has appeared and solidified, and the future "profit bottom" may become the key factor for the continuation and reversal of the market trend; in terms of the capital side, the key is still the willingness of active funds to inflow. Loose money, loose credit generally brings opportunities for growth stocks, which is the aforementioned "Technology Bull".